Here we continue studying a new type of regulatory B cells we discovered (Olkhanud et al, Cancer Research, 2011). These cells termed tBregs promote breast cancer metastasis by suppressing antitumor immune responses and inducing the generation of metastasis-promoting Tregs. We also reported that some subsets of human B-CLL are derived from tBregs, thus further reinforcing our original hypothesis that tBregs also exist in humans with cancer (Bodogai et al. Cancer Research, 2013). We have also devised a number of strategies that inactivate tBregs to improve antitumor immune responses (Lee-Chang et al., J. Immunol., 2013; Bodogai et al., Cancer Research, 2013). Because tBregs express low levels of CD20, they cannot be depleted using CD20-targeting antibody rituximab. In fact, the rituximab treatment instead enriches for tBregs and thereby exacerbates metastasis in mice, explaining a recent failure of this strategy in humans with solid tumors. Interestingly, while another type of regulatory cells, MDSCs, are thought to be the key cancer metastasis-supporting cells, regardless of their presence or cancer-induced expansion we noticed that cancer fails to metastasize if B cells or tBregs are lost. To reconcile this result with a current assumption on the importance of MDSCs in metastasis, we tested regulatory and pro-metastatic functions of MDSCs in B-cell deficient mice with breast cancer. We found that, whereas cancer expands MDSCs with only partially primed activity that is not sufficient to support metastasis, tBregs empower MDSCs with a full regulatory and pro-metastatic functions. We show that tBregs directly activate the regulatory function of both the monocyte and granulocyte subpopulations of MDSC by relying in part on TgfbR1/TgfbR2 signaling. MDSC fully educated in this manner exhibit an increased production of ROS and NO and more efficiently suppress CD4+ and CD8+ T cells, thereby promoting tumor growth and metastasis. Thus, loss of tBregs or Tgfbr deficiency in MDSC is sufficient to disable their suppressive function and to block metastasis. Overall, our data indicate that cancer-induced B cells/B regulatory cells are important regulators of the immune suppressive and pro-metastatic functions of MDSC. This finding has been recently reported (Bodogai et al., Cancer Research, 2015). Our data also indicated that, by producing extracellular vesicles (exosomes) and various soluble factors, breast cancer converts B cells into tBregs. For example, breast cancer cells induce tBregs by producing metabolites of 5-lipoxygenase pathway (5-LOX) and thereby targeting the proliferator-activated receptor alpha (PPARa) signaling in B cells (Wejksza et al., J. Immunology, 2013). To understand the induction of tBregs, we have established CRADA with Janssen R&D to screen cancer cell media and exosomes for eicosanoids and other lipid mediators involved in tBreg induction. The data are currently being analyzed in conjunction with our microarray and proteomic screening results. We found that cancer uses exosomes to deliver anti-oxidants to B cells to protect them from the oxidative stress, explaining surprising tolerance of tBregs to reactive oxygen species (ROS). Cancer exosomes were enriched in catalase. Expression of catalase is also highly upregulated in cancer cells that induce tBregs as compared to control cancer cells. Since free catalase cannot internalize into cells, by encapsulating it in exosomes, cancer appears to deliver into B cell cytosol. Functionally, this uptake protects tBregs from ROS cytotoxicity and thereby improves their survival. We also made significant advances in the understanding of the origin of tBregs. Our data suggest that both in mice and humans with breast cancer, these cells are B cells that stopped at early steps of their differentiation. We found several unique markers of tBregs. Overall, during the reported period we have made a number of novel findings: (i) Cancer cells use exosomes to communicate and control function of B cells. At least they deliver catalase to protect tBregs; and (ii) tBregs are also uniquely differentiated cells. We believe that these results have significant clinical and immunological importance.